£200m boost

Millions of workers now have right to keep tips

Wagamama, service, hospitality, restaurant

Service staff will benefit from the new law (pic: Terry Murden)

Millions of bar, restaurant and other hospitality and service workers will take home an estimated £200 million more of their hard-earned cash, as employers are now banned from withholding tips.

The Employment (Allocation of Tips) Act 2023 received Royal Assent and a new statutory Code of Practice will be developed to provide businesses and staff with advice on how tips should be distributed.

Workers will also receive a new right to request more information relating to an employer’s tipping record, enabling them to bring forward a credible claim to an employment tribunal.

Many hospitality workers rely on tips to top up their pay and are often left powerless if businesses don’t pass on service charges from customers to their staff.

It is now unlawful for businesses to hold back service charges from their employees, ensuring staff receive the tips they have earned. The measures are expected to come into force in 2024, following a consultation and secondary legislation.

Business and Trade Minister Kevin Hollinrake said: “As people face rising living costs, it is not right for employers to withhold tips from their hard-working employees.

UK Hospitality chief executive, Kate Nicholls, said: “Fantastic hospitality experiences don’t happen without a huge effort from our teams, both front and back of house, and tips are a generous way of customers showing their gratitude, while providing a welcome boost to employees’ earnings.

“Tips are just one part of what makes working in hospitality a great job and career.”

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